Aviva Life Insurance's India office searched for alleged tax evasion
What's the story
Income Tax Department officials recently conducted a search at the New Delhi office of Aviva Life Insurance, a subsidiary of the UK-based insurance giant.
The investigators seized documents and laptops and questioned several executives, including India CEO Asit Rath and CFO Sonali Athalye, as part of a probe into alleged tax evasion.
Aviva Life Insurance India, acknowledged the search and assured full cooperation with the authorities.
Details
Broader investigation involving many insurers
The investigation into Aviva is part of a larger inquiry involving numerous insurance companies accused of owing over $610 million (Rs. 50,814 crore) in unpaid dues.
A high-ranking Indian government official revealed that these firms allegedly recorded sales commissions exceeding the regulatory limit as advertising and marketing expenses, subsequently claiming unlawful tax credits.
State-owned Life Insurance Corporation (LIC) and private players such as HDFC Life and Bajaj Allianz are also under examination in this investigation.
What Next?
LIC receives demand notice
India's leading insurer, LIC, was issued a Rs. 290 crore demand notice by GST authorities in September as part of this probe.
The insurers have not issued any comments regarding the investigations.
The exact amount of taxes Aviva is accused of evading remains unclear. Aviva UK holds a 74% stake in Aviva Life Insurance in India, with the remaining shares owned by India's Dabur Invest Corp.
Insights
Aviva's market share in India
Aviva has a market share of less than 0.5% based on first-year premium collections in India.
The finance ministry, which oversees the GST department, has not yet responded to an email request by Reuters for comment.
The investigation's outcome and its potential implications for Aviva and other insurers are yet to be determined.